Debt & Bankruptcy Issues in the UK

Credit Awareness Week, an event that ran in the UK from May 14-20 highlighted the fact that half of Britons admit they make serious errors in financial judgement and have debt problems due to poor control of their finances. According to Credit Expert, more than 80% of people overspend on a regular basis, while millions of others are in so much debt that they seriously consider some form of debt relief such as bankruptcy.
Some of the financial errors that people make that are main contributors to overspending are taking out consolidation loans with long repayment terms and "therapy spending." In addition, research revealed that 5 per cent of people have either taken out an individual voluntary agreement(IVA) or filed bankruptcy because of too much debt. Almost 10 per cent admitted to taking out a credit card in order to pay off another credit card while another 10 per cent say they have missed payments on credit cards, loans, or mortgages because of their debt problems.
Credit Today Magazine along with an expert group of partner organisations that included Experian, the British Bankers Association, and the Consumer Credit Counselling Service organised Credit Awareness Week with the intention of helping the people in the UK learn how to gain better control over the financial decisions they make and thus, eliminate their debt problems.

Jim Hodgkins, managing director of Credit Expert states that the number of people who are making basic financial errors in judgement and even looking for quick fix solutions to debt problems such as filing IVAs is worrisome. What their research proved is that people in the UK have a serious lack of understanding about the long-term effects of financial judgement errors and how problems with debt can affect their credit rating and thus impact their financial future.